0205 GMT - Lower Australian bank net interest margins would likely lead to reduced revenue, which could be even lower than consensus estimates for the next three to five years, says fund manager Martin Currie's chief investment officer Reece Birtles in a note. He says there may also be reduced demand for credit from customers, as interest rates rise, and reckons that bank earnings are skewed to the downside, with CBA in particular looking overvalued. "For portfolios focused on total return, we believe that inferior NIMs and rising potential loan losses support underweighting the banks sector versus the S&P/ASX 200 Index," he says, but adds that dividends for the major banks still look attractive. (alice.uribe@wsj.com)

0150 GMT - Despite Commonwealth Bank of Australia recently embracing pricing discipline in mortgages, the effect will likely not materialize in 4Q, say Citi analysts in a note. They expect that 4Q will likely be a much more difficult quarter as savings deposit competition further weighs on margin. "Investors should evaluate whether a large valuation premium versus peers is still warranted, when trends and returns are starting to converge in the sector," says Citi, which keeps its sell rating. CBA is due to kick off the FY 2023 bank reporting season shortly. Citi notes that investors have been rewarded for holding onto their CBA positions so far, but wonders if the Australian lender's outperformance can continue. (alice.uribe@wsj.com)

0133 GMT - The price Lynas received for its rare earth last quarter was below expectations and could cause the market to rethink near-term neodymium-praseodymium, or NdPr, price assumptions, Citi analyst Paul McTaggart says in a note. The miner's 4Q average selling price of A$38.90/kilogram was 9% lower than the consensus. Its output, however, topped forecasts, totaling 1,864 tons of NdPr versus a consensus estimate of 1,654 tons. Shares in the miner are up 4.2% in Sydney at A$6.835/share. (rhiannon.hoyle@wsj.com; @RhiannonHoyle)

0119 GMT - Siteminder's accelerated timeline for hitting positive free cashflow surprises Morgan Stanley analysts, although not enough for them to go full bull on the stock. They tell clients in a note that the hotel-commerce platform's forecast of positive free cashflow in 2H FY 2024 is about six months earlier than anticipated. This lowers any balance-sheet risk and the stock should hold onto its re-rated sales multiple, they add. MS would like to see sustained top-line growth from product expansion before becoming more bullish. It raises target price 38% to A$4.00 and stays equal-weight on the stock, which is down 1.2% at A$4.24. (stuart.condie@wsj.com)

0108 GMT - PointsBet's assurance that positive FY 2024 earnings from its Australian business will offset weakness in Canada doesn't fully dispel Bell Potter analyst Chris Savage's caution toward the stock. He tells clients in a note that the gaming-tech provider's preliminary guidance looks positive, and points out that the company's FY 2023 group net win of A$391.1 million was higher than his A$387.2 million forecast. Yet he reduces his valuation of PointsBet's Australian business by 10% to A$180 million, outlining risks including the impact of higher interest rates and inflation on consumer demand. The target price falls 2.2% to A$2.20 and Bell Potter maintains a speculative buy rating on the stock, which is up 0.3% at A$1.69. (stuart.condie@wsj.com)

0049 GMT - Alcidion's 4Q update prompts Bell Potter analyst Thomas Wakim to raise his revenue forecasts for the Australian health-tech provider. Wakim points to the ASX-listed company's record quarterly cash receipts and a strong platform for FY 2024 revenue. He lifts his revenue forecasts for FY 2024 and FY 2025 by 4% and 6%, respectively. Wakim tells clients in a note that Alcidion's continued revenue growth in the absence of potential large-sum U.K. contracts likely to be awarded from mid-FY 2024 speaks positively to the company's financial stability. Bell Potter lifts target price 25% to A$0.15 and keeps a buy rating on the stock, which is down 4.0% at A$0.12. (stuart.condie@wsj.com)

0010 GMT - The RBA is likely to leave the official cash rate unchanged at its policy meeting on Tuesday given recent signs of rapidly cooling inflation and evidence that consumer demand is in the doldrums, says Ben Jarman, chief economist at JP Morgan. Still, the conflicting labor market and CPI signals make the decision a close call, he adds. JP Morgan now forecasts a further and final 25bp rate hike in November following 3Q CPI data. With that in mind, inflation remains uncomfortably high and meaningfully above the top of the RBA's target band, so it's likely the statement will retain its hawkish bias, Jarman says. (james.glynn@wsj.com; @JamesGlynnWSJ)

2344 GMT - Visa grant data from IDP Education's markets suggest ongoing strength and acceleration in the Australian company's student-placement business, UBS analyst Tim Plumbe says. He tells clients in a note that Australian student-visa grant volumes accelerated every month in the June quarter and reckons that this accelerating recovery more than offsets the 17% on-year softening in U.K. visa volumes. Volumes also appear strong in Canada but Plumbe wants more information before becoming more positive on IDP's prospects here. This uncertainty leads him to keep his forecasts unchanged. UBS has a buy rating and A$30.25 target price on the stock, which was at A$24.65 ahead of the open. (stuart.condie@wsj.com)

2336 GMT - Judo Capital Holdings is unlikely to declare a dividend in its coming FY 2023 results, but its revenue is likely to be broadly in line with consensus, E&P analyst Azib Khan says in a note. Following earlier Judo disclosures, E&P cuts its end-FY 2023 gross loans and advances by 3% to A$8.91 billion and expects the 2H FY 2023 net interest margin to be 3.29% versus Visible Alpha forecast of 3.24%. E&P forecasts FY 2023 profit before tax at A$113 million. "We expect pre-provision profit to beat consensus by 1%. With a lower credit impairment charge driving the PBT beat, we expect a muted share price response," E&P says. It keeps its neutral rating and A$1.3 target price. The stock was last at A$1.33.(alice.uribe@wsj.com)

2318 GMT - A sell off in Perpetual shares following its 4Q earnings update last week looks out of touch with what appeared to be a relatively small disappointment in the figures, says Bell Potter analyst Marcus Barnard in a note. Bell Potter says the 4Q funds under management statement showed higher levels of FUM from 3Q, albeit with an uptick in outflows, expense guidance and significant items. "This was not dramatically out of line with what we had anticipated, but we understand our forecasts were at the lower end of the range," says Bell Potter. It continues to favor Perpetual shares, seeing value in them, keeping its buy call, but cutting its target price 2.8% to A$31.11/share. Perpetual ended last week at A$24.06/share. (alice.uribe@wsj.com)

2315 GMT - Airtasker's 4Q trading update highlights the digital labor platform's resilience in challenging macro conditions, Morgans analyst Steven Sassine says. He lowers his revenue growth assumptions for FY 2024 by 10% and for FY 2025 by 14% to reflect the operating environment, but maintains a positive view of Airtasker's gross marketplace volume and revenue growth in the final quarter of FY 2023. Sassine tells clients in a note that Airtasker looks to have sufficient funds to keep implementing its organic growth strategy. He cuts the bank's target price by 13% to A$0.52 on his increased conservatism toward macro conditions but maintains an add rating on the stock, which ended last week at A$0.205. (stuart.condie@wsj.com)

2300 GMT - Life360 is likely to maintain FY earnings guidance when announcing its 2Q results, despite being well placed to exceed it, Goldman Sachs analysts say in a note. They tell clients that they see subscriber growth improving to about 100,000 quarterly net additions in 2H, which should keep the family safety app provider on course to hit its revenue targets. GS analysts also see longer-term earnings upside from Life360's pursuit of operating leverage and profitable growth. GS reiterates its buy rating and lifts its target price by 10% to A$9.20/share. Shares ended last week at A$7.61. (stuart.condie@wsj.com)

2256 GMT - IAG and Suncorp look to have started to reprice ahead of claims inflation, according to Macquarie estimates. The investment bank's analysts say in a note that consequently underlying margins appear to be improving into FY 2024, with IAG in the lead due to timing. Macquarie estimates show that across the Aussie general insurance sector, claims inflation for home and motor cover peaked in the December and March quarters, respectively. So, both IAG and Suncorp look cheap at current levels. Macquarie keeps outperform ratings on both stocks. (alice.uribe@wsj.com)

(END) Dow Jones Newswires

July 31, 2023 00:55 ET (04:55 GMT)